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Increased investment, financing vital for growth of resilient agriculture sector: Experts
The agriculture sector grew 2.19 percent year-on-year in the second quarter of this year, at a time when Indonesia's GDP contracted 5.3 percent. However, the sector has suffered from a low appetite for investment, especially from foreign investors.
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The Jakarta Post webinar Jakpost Up Close, Land without farmers: Invest in agriculture features (clockwise, from upper left) Financial Services
Authority (OJK) senior analyst Tomi J. Irianto, IFC operations officer Nyoman Yogi, TaniHub Group president Panmitra Wineka, The Jakarta Post journalist Yunindita Prasidya, Agriculture Minister Syahrul Yasin Limpo, Center for Indonesian Policy Studies (CIPS) head of research Felippa Amanta and Indonesian Farmers Union (SPI) chairman Henry Saragih on Tuesday, Sept. 1. (JP/-)
T
he Indonesian agriculture sector is in desperate need of increased investment and financing, despite having proven resilient during the pandemic.
The agriculture sector grew 2.19 percent year-on-year in the second quarter of this year, at a time when Indonesia's GDP contracted 5.3 percent.
"These promising figures demonstrate that agriculture can become a powerful engine to resuscitate the economy. Not only has the sector proven its hardiness during the crisis, it has the potential to create additional jobs and employ millions more workers," said Agriculture Minister Syahrul Yasin Limpo during a virtual talk hosted by The Jakarta Post.
However, the sector has suffered from a low appetite for investment, especially from foreign investors. In 2019, foreign direct investment (FDI) in the sector accounted for just 3 percent of total FDI, according to data from the Investment Coordinating Board (BKPM).
Felippa Amanta, the head of research at the Center for Indonesian Policy Studies (CIPS), said investment in agricultural innovation could boost farmers’ productivity.
As many as 20,000 farmers who have partnered with food and beverage company PT Nestlé Indonesia for more than 30 years in Lampung have produced 1.2 tons coffee per hectare each year, according to the think tank’s 2019 study. Their productivity has doubled from 0.5 tons per ha.
“So you have investment in extension services that introduce foreign technology, research and development and improved farming methods,” Felippa said during the Jakpost Up Close webinar.
